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The Importance of a Financial Check-Up

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Financial Checkup

Can you believe 2019 is already half over? At this halfway point, I was checking some internal figures. I realized I’ve done (along with my trusted right-hand man, Tom) 116 financial check-ups this year. That’s 116 different entities who’ve come in, or telephoned, for a discussion about their financial status. Some of these individuals are very diligent about coming in for their regularly scheduled meetings. Others, unfortunately, are not.

Because of their importance, I wanted to share why these meetings are critical to success.

The 11 Reasons.

1. Course Correction – My first reason for regular scheduled check-ups is the ability to course correct. If you don’t come in for three years, we may find you are now three years further behind. I see this all the time. Someone had a few unexpected expenses arise and they lowered their savings. Then they failed to increase it again until we got in their ear. The longer between meetings, the further off base this can leave you.

2. Track Progress – At Diversified, we believe modeling is essential to our client’s success. One of the offshoots of modeling is it allows us to track the progress towards ones goal. Whether that be retirement, college funding, or that beach house. Having these meetings gives us that forum to understand if you are on track and the reasons why.

3. Benchmark – Often times the same modeling gives our clients a sense of where-do-I-stand versus others in similar situations. It’s also a great learning tool. The more people we help can allow us to gain a better sense of where everyone stands.

4. Validate – These reviews are a great way to validate our decisions and advice. If we do them enough, it creates an unbelievable bond between us and our clients. Seeing is believing. The more frequent we meet, the more we can see how small tweaks lead to big changes.

5. Reforecast – In the infamous words of Forrest Gump, “Life is like a box of chocolates. You never know what’cha gonna get.” When we run projections, they are just that: projections. By their nature, they aren’t meant to be perfect. We can’t predict everything. Your lives constantly change. The more we get together, the more we can stay on top of these changes. This helps better understand the impact on your financial health.

6. Things become more accurate – Those who come in frequently trust the concepts more. They have a better sense of their expenses, as they are discussed often. They also have a better sense of where they’re heading. Each meeting continually smoothes out the inconsistencies.

7. Clean up old items – We take pride in staying persistent with our clients. We want to help you get “stuff” done. Unfortunately, things do slip through the cracks, as there are only so many reminder emails we can send. Frequent meetings let’s you see (or hear) our emotions and helps impart the importance of completing the “next item.” I’ve found meetings serve as a better catalyst to change than an email.

Related: The 10 Big Retirement Mistakes to Avoid

8. The tiebreaker (or, the voice of reason) – I’m lumping these two together. Often in these reviews, I have the pleasure of playing both. Sometimes a couple is divided. Then I get to play the tiebreaker and help the decision. I assist them in looking at all the facts and what seems best for their situation. In other instances, a couple is aligned on a bad idea. They may be convincing themselves that the vacation home is a great idea when, in fact, it isn’t. In these situations I get to step in to diffuse the situation. This helps prevent a potential major setback. Again, we can’t do this if we don’t have a regular, structured meeting.

9. Hold each other accountable – It’s amazing what facing our own shortcomings can elicit. Knowing you are going to have to face the music when you come in often keeps clients accountable. They don’t want to come in and admit they failed. This cuts both ways as well. We want to do what we promised. These reviews force accountability on both side.

10. Clear up misunderstandings– Perspective is everything in the financial planning industry. I can have two clients invest in the same thing and because one started three months earlier, they may have completely different investment experiences. These meetings allow us to keep everyone grounded and clear up any misunderstandings.

11. Understand what has changed– Sometimes more than just a financial situation has changed. It happens all the time; other important data points have changed, or even risk tolerances. In our meetings, we can understand and adjust for all changes.

Meetings effect change.

At the end of the day, these reviews are a core value we provide. They create a forum for us to advise and effectuate change for our clients. This is at the crux of our relationship with clients. We want to be as big a part of this ride as possible. In my experience the more we are able to meet the more we are able to provide, and that leads to dreams fulfilled.

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